Bespoke highlights the Dogs of the Dow strategy – buying the 10 Dow stocks with the highest dividends at the start of each year. The Dogs outperformed the Dow in 2010 (so far) by 2x: 13% vs 6.6% for all 30 Dow stocks. The Dogs ran away from the other 20 Dow stocks, beating them by 4x: 13% to 3.4%.
This is one of the simplest trading strategies, with one decision a year, even simpler than Sy Harding’s seasonal pattern, with two decisions: buy in Oct/Nov when the MACD goes positive, and sell in Apr/May when it turns down.
Here are the Dogs right now, for 2011.
Seems to me a real winner would be to combine the two: buy the Dogs in Nov to get the kickoff to the seasonal strong pattern. Any reader done the analysis? Please share.